Chart Patterns Cheat Sheet: The Complete Guide
Every technical trader eventually builds a mental library of shapes; some that mean "this trend is ending" and some that mean "this trend is about to keep going." That library is what chart patterns actually are, and most traders learn them piecemeal: one thread on triangles here, one video on head and shoulders there, with no real structure tying it together.
This cheat sheet is that structure. It groups the major reversal and continuation patterns side by side, gives a one-line read on what each one signals, and lays out the trading framework; entry, stop-loss, target, that applies to all of them, so you're not memorizing eight separate rulebooks. Two of the most-searched patterns, cup and handle and head and shoulders, get their own full breakdowns linked below; everything else is summarized here in enough depth to trade from directly. If you want to trade the breakout via forex CFDs on Ouinex once you've spotted a setup, the framework section below is where that decision gets made.
What Are Chart Patterns?
Chart patterns are recognizable price shapes that form on a trading chart over multiple candles, and they signal whether the current trend is more likely to continue or reverse.
That word "multiple" is the key difference from candlestick patterns, which form over just one to three candles and read short-term shifts in sentiment rather than broader trend structure, the two are related but distinct tools, and the difference gets its own section further down this page.
Every pattern below falls into one of two categories: reversal patterns, which suggest the current trend is ending, and continuation patterns, which suggest the current trend is pausing before it resumes. Knowing which category a shape belongs to matters more than memorizing its exact name, since the two categories point to opposite trades.
Most patterns also tell you something about where they're likely to show up, not just what they mean once they do. Reversal patterns tend to form after an extended, well-established trend, at the point where the market's dominant side is running out of fresh buyers or sellers to keep pushing price in the same direction. Continuation patterns tend to form mid-trend, after a fast move has attracted enough profit-taking to pause the advance without actually reversing the underlying pressure behind it. That context, where in a trend a shape appears, is often as useful for filtering out false patterns as the shape itself.
Reversal Patterns
These patterns form when a prevailing trend is losing momentum and price is more likely to turn than to keep going in the same direction.
Head and shoulders (and inverse head and shoulders): three peaks, a left shoulder, a higher head, and a right shoulder that fails to reach the head's high, connected by a neckline that acts as the key support level. A confirmed close below the neckline signals a reversal from an uptrend to a downtrend. The inverse version is the same structure upside down, signalling a reversal from a downtrend to an uptrend instead. It's one of the oldest and most widely referenced reversal signals in technical analysis, and it shows up across every asset class and timeframe, from multi-month patterns on major stock indices to intraday versions on crypto perpetuals. See the full head and shoulders pattern guide for identification, entry, stop-loss, and target.
Double top / double bottom: a double top forms when price hits a high, pulls back, rallies to roughly the same high a second time, and fails to break through, signalling exhaustion at that resistance level, with confirmation coming on a close below the pullback low between the two peaks. A double bottom is the mirror image at a support level: two roughly equal lows separated by a bounce, confirmed on a close above the bounce high. Both are simpler two-peak (or two-trough) versions of the same reversal logic behind the head and shoulders, one fewer peak, and correspondingly a little less pronounced as a warning sign, which is part of why traders often want extra volume confirmation before acting on one. They're especially common at well-known round-number levels and prior all-time highs, where a crowd of traders is already watching the same price and reacting to it the same way. See the full double top pattern guide for identification, entry, stop-loss, and target.
Continuation Patterns
These patterns form when a trend pauses to consolidate before resuming in the same direction it was already moving.
Cup and handle: a U-shaped consolidation (the cup) followed by a shallow downward-drifting pullback (the handle), typically appearing after an uptrend and signalling the uptrend is likely to resume once price breaks above the handle's resistance. The rounded cup shape reflects a gradual shift from selling to accumulation, which is why a sharp V-shaped dip is treated as a weaker version of the setup. It's most associated with equities, it was originally documented on stock charts, but the same shape appears regularly on crypto and forex charts too. See the full cup and handle pattern guide for identification, entry, stop-loss, and target.
Flags and pennants: both form after a sharp, fast price move (the "flagpole"), followed by a brief consolidation, a flag consolidates in a small parallel channel, while a pennant consolidates in a small symmetrical triangle. Both are short-lived compared to most other patterns, often resolving within days, and both typically continue in the direction of the flagpole once price breaks out of the consolidation. Because they depend on a genuinely sharp initial move, they show up most often in fast-moving, higher-volatility markets, crypto and momentum-driven stocks in particular.
Triangles: formed by converging trendlines as price consolidates. An ascending triangle has a flat resistance line and a rising support line and typically breaks upward, since each pullback is shallower than the last, a sign buyers are getting more aggressive. A descending triangle is the mirror image and typically breaks downward for the same reason in reverse. A symmetrical triangle has both lines converging toward each other and can break in either direction, making volume and the direction of the initial move into the triangle more important clues than with the other two variants, since the shape itself doesn't lean bullish or bearish the way the ascending and descending versions do. Triangles are common on forex majors in particular, where multi-week ranges often compress ahead of a scheduled economic event.
Wedges: similar to triangles in that two converging trendlines squeeze price into a narrowing range, but both trendlines slope in the same direction rather than one being flat. A rising wedge tends to break downward and is sometimes read as a reversal signal rather than a pure continuation pattern, depending on where it forms in the trend, a rising wedge after a long uptrend is read differently than one forming as a brief pause within one. A falling wedge tends to break upward for the same reason in reverse, and is more commonly treated as a genuine continuation setup within a downtrend, or as a bullish reversal at the end of one.
Here's something most cheat sheets don't mention: fame and performance aren't the same thing. In technical analyst Thomas Bulkowski's large-sample rankings of chart patterns by average price move, cup and handle actually earns its reputation: it's his top-performing continuation pattern by average rise. Head and shoulders doesn't fare nearly as well on that same measure: it doesn't crack his top 10 reversal patterns by magnitude at all, while patterns almost no retail trader has ever heard of, like rounded tops, bump-and-run reversals, and Eve & Eve double bottoms, outperform it on raw average move size. Teaching order and search volume track how visually obvious and well-documented a pattern is, not how large the average move tends to be once the pattern actually plays out. Investments can go up and down. Past performance is not necessarily indicative of future performance.
How to Trade Chart Patterns: A Quick Framework
Regardless of which specific pattern you're looking at, nearly every chart pattern trade comes down to the same three components. Learning to recognize these three pieces on any pattern is more useful long-term than memorizing the exact rules for eight individual shapes, since it's the same framework underneath every one of them.
A confirmed break. Wait for a closed candle beyond the pattern's key level, a neckline, a handle's resistance, a triangle's trendline, rather than acting on an intraday wick through it. Price frequently pokes through a level intraday and snaps back before the session closes, which is exactly the scenario a confirmed-close rule is designed to filter out.
A stop-loss level. Every pattern has a natural invalidation point, below a handle's low, above a right shoulder, back inside a triangle, and that point should define the stop before the trade is entered, not after. Deciding on a stop-loss level after already being in the trade tends to produce a wider, less disciplined stop than deciding on it while looking at the chart objectively beforehand.
A measured-move target. Most patterns share the same basic logic for a first target: take the pattern's vertical size (cup depth, head-to-neckline distance, triangle height) and project it from the breakout point in the direction of the break. This is a planning reference, not a guarantee of where price will actually go, many traders use it as a level to take partial profit or move a stop to breakeven, rather than as an automatic full exit.
Together, these three components are also what let a trader calculate position size before ever entering, the distance from entry to the stop-loss defines the risk in price terms, and that risk, combined with account size and the leverage in use, is what determines how large the position should actually be.
The framework reads the same regardless of which pattern produced the numbers. A cup and handle's measured move takes the cup's depth and projects it up from the breakout; a head and shoulders' measured move takes the head-to-neckline distance and projects it down from the breakdown; a triangle's measured move takes the triangle's height at its widest point and projects it from wherever price exits the converging trendlines. The label on the pattern changes which direction the projection points and which price point it starts from, it doesn't change the underlying math, which is always "vertical size of the pattern, projected from the breakout point."
Trading chart pattern breakouts with leverage magnifies both gains and losses, always confirm the break and set a stop-loss before entering. If terms like "breakout" or "support and resistance" aren't fully familiar yet, Ouinex's trading glossary is a good companion to keep open while you study any of the patterns above.
Chart Patterns vs Candlestick Patterns: What's the Difference?
Chart patterns form over many candles and describe overall price structure, while candlestick patterns form over just one to three candles and describe short-term shifts in sentiment.
Think of it as a difference in zoom level. A candlestick pattern like a hammer or an engulfing candle is a single data point, a signal that buying or selling pressure shifted abruptly within a short window, often just one trading session. A chart pattern like the ones on this page is built from dozens or hundreds of those candles taken together, and describes a slower, structural story: where support and resistance have formed, how a trend has behaved, and what shape the consolidation between buyers and sellers has taken.
Neither tool makes the other redundant, and traders who only learn one tend to miss half the picture, a chart pattern tells you the broader setup is in place, while a candlestick pattern can tell you the specific moment sentiment actually shifted within it. A candlestick reversal signal appearing right at a chart pattern's key level; a neckline, a handle's resistance, is generally considered a stronger combined signal than either one alone. For the candle-by-candle side of this, see Ouinex's candlestick patterns cheat sheet.
FAQ: Chart Patterns Questions Answered
What is the most reliable chart pattern?
No single chart pattern is reliable in isolation, reliability depends far more on confirmation, a genuine close beyond the key level backed by volume, than on which pattern name is involved. Patterns with a long, well-documented history, like the head and shoulders and the cup and handle, tend to be more thoroughly studied and consistently defined than newer or less common formations, which is part of why they're usually taught first. That history is a reasonable starting filter for which shapes to learn first, but it isn't a substitute for waiting on the same confirmed-break, stop-loss, and target framework described above. A well-formed, well-confirmed version of almost any pattern on this page will generally outperform a textbook-perfect shape traded without confirmation.
Do chart patterns work in crypto trading?
Yes, chart patterns are asset-agnostic, and the same shapes that form on stock or forex charts show up on crypto charts as well. Crypto's typically higher volatility can make patterns look less symmetrical and can widen the typical ranges for things like pullback depth, so volume confirmation on any breakout becomes an especially important filter in crypto specifically.
What's the difference between a reversal and a continuation pattern?
A reversal pattern, like head and shoulders or a double top, signals that the current trend is ending and price is likely to turn in the opposite direction. A continuation pattern, like a cup and handle, a flag, or a triangle, signals that the current trend is pausing and is more likely to resume in the same direction once the consolidation resolves. Knowing which category a pattern belongs to matters as much as identifying its shape correctly, since the two categories imply opposite outcomes, mistaking one for the other means trading in the wrong direction entirely, not just getting the timing wrong.
Is there a chart patterns cheat sheet I can download?
This page is designed to work as a cheat sheet on its own, and a downloadable version covering the same patterns is planned as a future companion resource.
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